Distribution demand speeds freight growth in Indianapolis

Distribution demand speeds freight growth in Indianapolis

Knight Transportation opens regional operations center in Indianapolis in April.

Mention Indianapolis and its famous speedway comes to mind, but so should supply chain velocity, warehousing and freight.

The boom in industrial development fueling construction of U.S. warehouses and distribution centers reverberates in Indianapolis, which claims to be the “crossroads of America.” The claim isn’t an idle one: four Interstate highways converge on and encircle Indiana’s capital city.

In 2015, Indianapolis was one of the most active markets for portfolio-scale logistics investment involving multiple properties, according to industrial real estate firm Jones Lang LaSalle.

Last year, JLL helped arrange the $167 million sale of an eight-building, 4-million-square-foot industrial distribution site in Indianapolis to Olympus Partners and Biynah Industrial Partners.

Demand for high quality industrial space in Indianapolis, especially near major interstates, has grown, and absorption — the utilization of existing space — is at high levels, JLL said. That's generating greater demand for trucking service.

Indianapolis is home to Celadon Trucking, founded by the late Steve Russell in 1985 and now the 12th-largest U.S. truckload carrier. Other trucking companies are drawn to the city for the same reason: it's where the freight is.

Old Dominion Freight Line, the fourth-largest U.S. less-than-truckload carrier opened a 63-door terminal in Brownsburg, Indiana, May 17, bringing its total number of terminal doors in the Indianapolis area to 380.

The Brownsburg terminal is the second new facility for ODFL, a nearly $3 billion trucking company, this year. The carrier has four other terminals in the Indianapolis market.

In April, Knight Transportation opened a regional operations center in Indianapolis. The Phoenix-based truckload carrier invested $4.62 million in the 25-acre site in Plainfield, replacing an older, smaller facility, the Indiana Economic Development Corporation said.

The $1.2 billion company doubled the size of its office, built a 20,000-square-foot truck maintenance shop, along with a truck wash and fueling station, and installed LED lights.

“We needed a location that could support our growth,” Dave Jackson, president and chief executive officer, said in a statement. “Plainfield’s warehousing and logistics sector is quickly becoming the place to be in the Indianapolis metro area for both our customers and transportation providers.”

Increased construction, truck traffic and distribution activity strains infrastructure, and Indianapolis plans to spend $126 million on 60 road and bridge projects this summer.

The Conexus Indiana Central Regional Logistics Council, a state-sponsored forum of logistics executives, last fall proposed dozens of projects to eliminate regional freight bottlenecks.

A major goal is completing the extension of I-69 from Scotland, Indiana, to Indianapolis, along with the construction of additional Interstate lanes to smooth the flow of truck traffic.

Contact William B. Cassidy at bill.cassidy@ihs.com and follow him on Twitter: @wbcassidy_joc.